Forex market today: Dollar steady, pound weakens after UK data
The US Dollar remained resilient against major currencies on Friday as investors continued to assess developments surrounding the ongoing Middle East conflict and possible negotiations between the United States and Iran.
The greenback held firm after a volatile trading session on Thursday, while market participants also awaited fresh economic data from Europe and the United States.
Investors are closely watching the release of Germany’s IFO business sentiment figures and the revised University of Michigan Consumer Sentiment Index for May later in the day.
Attention is also on the White House, where US President Donald Trump is expected to swear in Kevin Warsh as the new chair of the Federal Reserve.
US-Iran developments keep markets cautious
Market sentiment improved during Thursday’s American trading session after reports suggested that the United States and Iran were nearing the final stages of an agreement.
The optimism initially pushed the US Dollar Index above 99.50, its highest level since early April.
However, the index later erased a large part of its gains and ended the session near 99.20.
Wall Street’s main indexes closed with marginal gains.
Fresh comments from Iranian and US officials on Friday kept investors cautious.
Reuters reported during the Asian trading session that a senior Iranian official clarified that no agreement had yet been reached with the United States.
The official reportedly said that gaps between both sides had narrowed but added that Iran’s uranium enrichment and Tehran’s control over the Strait of Hormuz remained the key sticking points.
Meanwhile, US Secretary of State Marco Rubio told reporters there were some good signs regarding negotiations.
“I don't want to be overly optimistic.
So, let's see what happens over the next few days,” Rubio said.
The US Dollar Index stayed stable near 99.20 during the early European session on Friday, while US stock index futures traded modestly higher.
US business activity remains steady
Economic data released from the United States on Thursday showed that private sector business activity continued to expand at a healthy pace.
The S&P Global Composite Purchasing Managers’ Index came in at 51.7 in the preliminary May reading, matching April’s figure.
The data supported the view that economic activity in the United States remains relatively stable despite ongoing geopolitical uncertainty.
UK retail sales disappoint markets
In the United Kingdom, fresh economic data pointed to weaker consumer activity.
The Office for National Statistics reported that Retail Sales declined by 1.3% month-on-month in April.
The reading followed a 0.6% increase recorded in March and came in worse than market expectations for a 0.6% decline.
Following the release, GBP/USD struggled to establish direction and traded in a narrow range below 1.3450 after posting modest losses on Thursday.
Euro steadies after German GDP revision
EUR/USD continued to move sideways slightly above the 1.1600 level after recovering during Thursday’s American session.
Data from Germany showed that the country’s Gross Domestic Product expanded at an annual rate of 0.4% in the first quarter.
The figure was slightly higher than the initial estimate of 0.3%.
Gold weakens while yen remains stable
Gold prices remained under pressure after a volatile session on Thursday.
After falling below $4,500 earlier in the day, Gold reversed course and ended Thursday nearly flat.
On Friday morning, XAU/USD traded around $4,530 while remaining under modest bearish pressure.
In Japan, National Consumer Price Index inflation rose by 1.4% year-on-year in April, following a 1.5% increase in March.
USD/JPY remained relatively quiet during the European session and traded slightly above the 159.00 mark.
The post Forex market today: Dollar steady, pound weakens after UK data appeared first on Invezz
